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What is Full Reserve System in Islamic Banking about?

This article compares fractional reserve free-banking theory with the Islamic banking system, highlighting the risks associated with fractional reserve banking, such as economic instability and liquidity risks for Islamic banks. It proposes a transition to a fractional reserve free-banking model, specifically the A-F model, to align with Islamic principles and mitigate these risks. The research emphasizes the need for a banking system that separates money creation from banking functions to enhance economic

Author

Shiva Adiyodi

Language

EN